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Sunk costs and opportunity costs

Sunk costs, opportunity costsWell, it’s a wrap…. almost. We’re shipping boxes of binders, exhibits, books, and hundreds and hundreds of pages of documents tomorrow to the accrediting commission, and now it’s a waiting game. It’s been a grueling year – the first application last spring, and now this past fall, responding to their comments and concerns, we had to significantly revise and re-submit.

We hit some real stumbling blocks, some moments when we were all tempted, seriously tempted, to just throw up our hands and walk away. The project was a total meditation on power and effort, of digging deep and pushing forward. Yet at each obstacle, the question came up, is it worth it?

It’s extremely hard to know, because of the psychology (and economics) of sunk cost and opportunity cost. Sunk cost is an economic term for the money or sweat equity you’ve put into something. And opportunity cost is about the future: for every minute or dollar you spend on something, there’s something else you’re not spending it on. And it’s extremely hard to tell which is the better route. Knowing when to push and when it’s not worth it is extremely hard, psychologically. We get attached all the time, to our detriment, because of sunk costs: relationships, jobs, habits, military campaigns, etc.

With this project we had to consider each time we hit an obstacle (and sometimes it seemed to happen daily), what is the future benefit? Can we imagine it? Can we weigh this level of effort against the future cost? How do we know we’re not just hanging on because of sunk cost?

Working with change of any kind, whether with people or systems, understanding the psychology of investment and loss, is critical. Just as I was cooking on this all, my friend Carol Zahner, sent me this link, The Upside of Quitting.

Double loop learning and the value of threat

I can’t say for sure, but I’ve either developed a competitive spirit as I have gotten older, or, I’ve just become less self-conscious about it. It’s become most evident when I cycle in large group events. While some riders have to tune out the others and focus on their own pedaling speed, I do the opposite. I quickly notice the more competitive riders and pace myself according to their speed.

In some areas, competitiveness is seen as a good thing. But where I come from – the peace and love era of the 70s, a progressive liberal college, the experiential psychotherapy culture – competition was a bit of a no-no. So noticing my burgeoning competitive spirit made me curious. What is it? What does it do for me? (more…)

Taking the pulse of your learner

I just finished teaching a seminar in Australia, Beyond our Grasp: The Art, Science and Flow of Learning, Performance and Change. I really enjoyed working with a new topic, and having the opportunity to trial new ideas and learn together with such an enthusiastic and experienced group of participants.

We looked at the challenge of learning and outcomes: when learning is tied to an outcome, a funny thing happens. The outcome is experienced as external to ourselves. Our learning is now complicated by the presence and pressure of someone or something outside ourselves –  a teacher or program requirements, the organization’s goals, a manager, coach, or teacher, a professional association, or even a result or number. Even when the goal is self-assigned, for instance, quitting smoking or losing weight, because we are changing something about ourselves, it creates an inner conflict: one part of us against or trying to change another. Even the tiniest sense of conflict or lack of consensus with our self-interest can torpedo the whole enterprise. This is why research on workplace motivation shows conclusively that intrinsic motivation trumps external motivation, including paid incentives:

people who expect to receive a reward for completing a task or for doing that task successfully simply do not perform as well as those who expect no reward at all.

(more…)

Notes on scandal: leadership and public learning

Last week news broke that 15 year-old Phoebe Prince killed herself after months of harassment and bullying by her classmates at a South Hadley, MA high school. School administrators initially denied knowing anything about it, even though Prince’s mother had complained to school officials, and a renowned bullying expert had been called in to consult on the problem (Coloroso reported that the school had not fully implemented her recommendations: http://thecrimereport.org/2010/04/02/ma-school-where-student-died-hadnt-carried-out-anti-bullying-plan/).

And over the Easter weekend, while many senior Catholics across Europe apologized in their Easter addresses for the ongoing sexual abuse of children by clergy, a senior cardinal defended Pope Benedict XVI from what he called petty gossip and a vile smear operation by the anti-Vatican media. On Good Friday the Pope’s personal preacher, Father Raniero Cantalamessa, compared the criticism of the Catholic Church over child abuse to the collective violence suffered by the Jews. (more…)

Learning as its Own Reward

I asked my trainer and owner of Recreate Fitness, Nathan, if he would coach a “cross-fit club” with my 5th grade boys from the I Have a Dream foundation. It’s one of my kids and leadership clubs I’ve been doing. It’s definitely been fun, but also challenging. Some of the games and activities require technique, balance, or strength. And even the most athletic kids, the ones used to winning the races and being chosen first, suddenly find themselves in the unusual position of struggling. They realize it’s hard, and not something they can just do. For kids who aren’t confident or kids who have been taught to expect praise for whatever they attempt, their first response is to get impatient and frustrated. This is a critical moment in our emotional development which has profound lingering effects. When progress isn’t immediate, when gratification or success is deferred, the difference in how we manage that moment is critical to our success in life. The well known marshmallow test shows how kids deal with delayed gratification.

So how are my boys managing this? Well, a few of them get serious and focused. A couple of them just give up after one or two attempts, and wander onto something else. Some internalize their frustration, and get upset with themselves. And others externalize their frustration. They get angry at the activity itself, me, Nathan, or whatever they deem is in their way of success. One of them, Adbul, has really gotten my attention. (more…)

Five Leadership Trends for the Next Decade

The last decade is a strong contender for the title “the decade of dubious leadership.” From the handling of Katrina to the collapse of the banking system, it was a disastrous decade for leadership. Ironically, it was also a decade during which more was written on leadership than ever before. I’m hoping for a better decade of leadership, and here are my top five leadership trends I’d like to see take off in the coming years. (more…)

Single, available hero seeking big messy problem

What’s the solution for solving the health care mess? Global warming? The economy? OK, these are bad examples, obviously if we knew, and if it were that easy, they’d be solved. But the question I want to ask is, why do we wait to tackle our problems until they are so complicated, so messy, so escalated that they require Herculean efforts? (more…)

Why I Love Jerry Maguire

I’m getting clearer on what this blog is about. I have started to call it, to myself at least, Learning and Leading. While leadership and power is a main focus, looking over the posts, I see that a great deal of what I write about involves the problems of learning to lead. And that reminds me of Jerry Maguire.

I love the movie Jerry Maguire, (yes, the one with the memorable one-liners like “show me the money,” or “you had me at hello”) because Jerry Maguire captures so perfectly the jet lag between knowing something and living it. One of the greatest and most frustrating psychological puzzles has to do with the difference between our espoused beliefs and our actual behavior. I’m not just talking about hypocrisy but about knowing. Just because we can think something, or even deeply believe something, doesn’t mean we know what it means as a way of being, as a day-to-day behavior. We have to learn by living it. (more…)

Performance management, feedback and learning from life

The Process Work Institute is about to begin the process of applying for regional accreditation. My job is to help spearhead this process, and one of the tasks is to create assessments of the programs, of student progress, of individual courses, and of faculty. I’ve been up to my elbows this summer studying the literature on program and faculty assessments, and I have to confess, there’s something about the logic in it all that’s appealing. Even though I’m a progressive education fan from way back (Antioch College ’81) the literature on aligning goals and outcomes and performance is refreshing. It’s something of a relief coming away from philosophies, ideologies and concepts of human development to the practicality of metrics and asking (and then defining!) does it work? [I also read Paul Tough's book, Whatever it Takes, about Geoffrey Canada's Harlem charter school as well as other books on recent charter schools' successes in closing the achievement gap, and have newfound respect for the question, does it work?] (more…)

The Secret to Superior Performance? Not such a secret anymore

There’s a lot of interesting research out there on excellence and superior performance. What accounts for superior performance? Why are some people superstars at what they do, and others just average? The question is pretty interesting, not only for what it says about excellence, but more generally, what it says about learning and development. Gladwell’s book, Outliers, is only one of several books looking at this phenomenon. The authors behind The Heart and Soul of Change: What Works in Psychotherapy, Hubble, Duncan and Miller have also been looking at superior performance in psychotherapy in their article, Supershrinks: What is the secret of their success?

As these authors and others point out, trying to account for superior performance by looking at innate talent, genius, high IQ hasn’t yielded many results. The fact is, superior performance is, in the words of Thomas Edison, one percent inspiration, ninety-nine percent perspiration. Now thatâ??s either inspiring or depressing for us average folks. Inspiring because it means excellence is available to all those willing to put in the work. And depressing because, well, hard work. Gladwell puts a figure to that hard work: 10,000 hours. It’s at 10,000 hours that people achieve true mastery. Bill Gates had 10,000 hours on a computer before starting his software business with Paul Allen. Michael Jordan spent thousands of hours in the gym, improving his performance, after he was cut from his high school basketball team. 10,000 hours of practice in one activity accounts for a virtuosity that we see as natural born talent. Or is it? (more…)

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